greenbooks · June 17, 1974

Greenbook/Tealbook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing).

A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

Content last modified 6/05/2009.

CONFIDENTIAL (FR)

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

June 14,

By the Staff Board of Governors of the Federal Reserve System

1974

SUPPLEMENTAL NOTES The Domestic Economy Wholesale prices.

Wholesale prices rose 1.3 percent,

adjusted (not at an annual rate), between April and May.

seasonally

The change

reflected a further large advance in prices of industrial commodities and the third consecutive month of decline in the index of farm products and foods. WHOLESALE PRICES Percentage changes to May 1974 from: 1 year 1 month earlier 1/ earlier 2/

Commodity groups

All commodities Farm products 3/ Industrial commodities Textile products and apparel Hides, skins, leather, and related products Fuels and related products and power Chemicals and allied products Rubber and plastic products Lumber and wood products Pulp, paper and allied products Metals and metal products Machinery and equipment Furniture and household durables Nonmetallic minerals Transportation equipment Miscellaneous products 1/ 2/ 3/

1.3

16.4

-2.2

8.1

2.7

20.1

1.2 1.0 2.9 3.3 3.3 2/ - .3 1.7 4.7 2.5 1.3 3.2 1.7 2/ 3.9 2/

13.7 2.9 55.8 25.3 19.9 5.9 21.5 28.1 10.4 8.2 15.5 5.5 11.5

Seasonally adjusted. Not seasonally adjusted. Farm products and processed foods and feeds. The index of industrial commodities rose by 2.7 percent,

adjusted, as price increases were large and widespread. metals and metal products,

seasonally

Increases for

machinery and equipment, fuels and power, and

chemicals and products accounted for about three-fourths of the increase.

- 2-

The index of farm products and food fell 2.2 percent, adjusted.

Lower prices posted for livestock, meats,

seasonally

dairy products,

manufactured animal feeds, and fluid milk accounted for most of the decline. The WPI for May reflects not only the annual revision of seasonal factors but also a revision of prices for refined petroleum products.

Pricing of petroleum products formerly was based on spot prices

published in a trade journal. petroleum companies.

The new data are obtained directly from

The following graphs depict some wholesale price

indexes before and after the recent revision.

- 3-

WPIALL COMMODITIES 16 0

1967=100

BEFORE AND AFTER REFINED PETROLEUM REVISIONS

160

REVISED

150 -

- 150

140 -

'---

140

130

i 12U0

973 1973

.97

. 1974

"a-

ILU

-4-

WPI INDUSTRIAL COMMODITIES 1967=100 BEFORE AND AFTER REFINED PETROLEUM REVIS IONS

160

FORMER REVISED

--- 160 150

150

140

130

120

110

300

110

1974

1973

WPI FUELS AND RELATED PRODUCTS. AND POWER 1967=100 SBEFORE AND AFTER REFINED PETROLEU M REVISIONS FORMER -----

300

REVISED

250

-1250

200

I I / I / I / I

150

100

150

1973

1974

100

-5 Real estate.

Merchant builder sales of new single-family homes

edged down in April, and while a tenth above the first quarter average, continued well below a year earlier and the peak in October 1972.

Builder

stocks of unsold homes remained at 9 months' supply, as the number of such units declined only slightly.

The median price of new homes sold was

essentially unchanged and still above the rising median price on unsold units.

In contrast to new-home sales, April sales of used homes were

almost 8 percent above a year earlier--the first year-over-year increase since July 1973.

The median price for existing homes sold, at $31,690,

tended higher and was 11 percent more than April 1973.

SALES,

STOCKS AND PRICES OF NEW SINGLE FAMILY HOMES

Homes Homes soldl/ for sale2/ (Thousands of units)

Months' supply

Median price of: Homes for sale Homes sold (Thousands of dollars)

1973

726 680 566 483

426 436 453 446

7.0 7.7 9.6 11.1

30.4 32.7 33.5 34.0

29.4 31.2 32.1 32.9

QI(r)

526

453

10.3

35.0

34.0

January(r) February(r) March(r) April(p)

474 514 590 584

450 459 453 449

11.4 10.7 9.2 9.2

34.2 34.9 36.0 35.9

33.4 33.5 34.0 34.3

QI QII QIII

QIV 1974

1/ 2/

Seasonally adjusted annual rate. Seasonally adjusted, end of period.

-6-

In the case of nonsubsidized rental apartment unite completed in the fourth quarter of 1973, 64 percent had been leased by the end of March 1974--still relatively high though somewhat less than in period last year. upward,

the same

The median rent on fourth quarter completions turned

but was only 2 percent above a year ago.

CORRECTIONS: Page 1-19, end of paragraph one, should be "a third of commercial and industrial outlays" (not of nonresidential outlays).

-7

The Domestic Financial Situation Mortgage market.

According to the HUD(FHA)

opinion survey,

average interest rates on new commitments for conventional new-

and existing-

home loans in the primary market rose 25 basis points further during May to new highs of 9.15 percent--a

finding that is

consistent with the weekly

survey of conventional mortgage rates at selected S&L's.

Private secondary

market yields on FHA-insured new-home mortgages rose 29 basis points to 9.46 percent--a new high for the series, and 28 basis points above the peak last September. AVERAGE RATES AND YIELDS ON NEW-HOME MORTGAGES (HUD-FHA Field Office Opinion Survey)

End of month

1973 - Low High Sept. Oct. Nov. Dec. 1974 - Jan. Feb. Mar. Apr. May 1/ 2/ 3/

Primary market Conventional loans Level 2/ Spread 4/ (percent) (basis points)

Secondary market 1/ FHA-insured loans Level 3/ Spread 4/ Discounts (points) (percent) (basis points)

7.70 (Jan.) 8.95 (Sept.)

30 (Jan.) 114 (Sept.)

7.55 (Jan.) 9.18 (Sept.)

15 (Jan.) 137 <Sept.)

2.2(Dec.) 9.4(July)

8.95 8.80 8.75 8.75

114 83 90 77

9.18 8.97 8.86 8.78

137 100 101 80

5.2 3.6 2.8 2.2

8.65 8.55 8.60 8.90 9.15

40 45 - 4 - 8 6

8.54 8.66 9.17 9.46

44 2 19 37

2.3 3.2 5.1 5.3

Any gaps in data are due to periods of adjustment to changes in maximum permissible contract rates on FHA-insured loans. Average contract rate (excluding fees or points) on commitments for conventional first mortgage loans, rounded to the nearest 5 basis points. Average gross yield (before deducting servicing costs) to investors on 30year minimum-downpayment FHA-insured first mortgages for immediate delivery in the private secondary market (excluding FNMA), assuming prepayment in 15 years. Average gross mortgage rate or yield minus average yield on new issues of Aaa utility bonds in the last week of the month.

-8

INTEREST RATES

1974 Highs

Taonw

May

f20

June 13

Short-Term Rates

11.60(6/12)

8.81(2/27)

11.46(5/15)

11.60<6/12)

8.90(4/30) 11.00(6/13) 11.50(6/13) 12.19(5/14)

6.93(2/6) 7.75(2/22) 8.13(2/25) 8.25(2/18)

7.94 11.00 11.50 12.00

8.36 11.00 11.50 11.75

11.00(5/22)

7.88(2/20)

11.00(5/15)

10.50(6/12)

8.86(5/6) 10.88(6/13) 9.69(5/7)

6.80(2/19) 7.50(2/22) 7.16(2/19)

8.26 10.75 9.25

8.44 10.88 9.27(6/12)

10.00(6/12)

7.50(2/27)

9.75(5/15)

8.65(5/3) 9.40(5/9)

6.37(2/15) 7.01(2/19)

8.23 9.08

8.28 8.97(6/12)

9.25(5/29) 5.75(5/10)

7.00(2/27) 3.70(2/15)

9.25(5/15) 5.35(5/17)

9.00(6/12) 5.25(6/14)

8.56(5/7) 8.23(5/6)

6.72(2/14) 7.40(1/4)

8.21 8.17

8.10 8.07

8.42(6/13ý) 9.3¢1(6/13)

7.73(1/2) 8.54(1/2)

8.36 9.12

8.42 9.31

9.34(5/22)

8.05(2/13)

9.23(5/15)

9.28p(6/12)

Municipal Bond Buyer Index

6.08(5/30)

5.16(2/6)

6.04(5/16)

6.04

Mortgage--average yield in FNMA auction

9.54(6/3)

8.43(2/25)

9.48

9.54(6/3)

Federal funds (wkly. avg.) 3-month Treasury bills (bid) Comm. paper (90-119 day) Bankers' acceptances Euro-dollars CD's (NYC) 90-119 day Most often quoted new 6-month Treasury bills (bid) Comm. paper (4-6 mo.) Federal agencies CD's (NYC) 180-269 day Most often quoted new 1-year Treasury bills (bid) Federal agencies

10.00(6/12)

CD's (NYC) Most often quoted new Prime municipals Intermediate and Long-Term Treasury coupon issues 5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa Utility

SUPPLEMENTAL APPENDIX A* QUARTERLY SURVEY OF BANK LENDING PRACTICES MAY 15, 1974 The responses to the May Quarterly Survey of Changes in Bank Lending Practices taken at 125 large commercial banks reflected the very Over 75 percent of the sharp recent growth of the banks' loan portfolios. bank officers reported stronger loan demand compared to three months earlier, and almost as many thought the heavy pace would continue or even In response to surging loan demand, strengthen in the coming three months. there was a severe tightening of both price and nonprice terms of lending, There were essentially no moves particularly at large, money center banks. toward easing. Many of the respondents complained of the high cost of funds, and a few of the slow growth of their deposits, that forced the adoption A sizable minority of banks surveyed of very tight lending policies. expressed a desire to hold back on commitments and new loan applications to improve liquidity and to reduce the ratio of loans to total assets. After the February survey in which 90 percent of the respondents had expected loan demand to weaken or remain unchanged, the prime rate declined from the 9-1/4 percent level then prevailing to 8-3/4 percent in March, but then rose steeply after mid-March and reached 11-1/4 percent Thus, 80 percent of the banks reported at the time of the May survey. Many of the respondents thought that the firmer interest rate policies. too low relative to market rates, and compenhigh rates charged were still The value of sating balance requirements were substantially stiffened. borrowers as depositors or as sources of collateral business grew in importance between surveys. The purpose of loans and the customer relationships of the loan applicants also became more critical determinants of whether loans were made, as the bankers attempted to maintain the flow of credit to established borrowers. More than half the banks adopted tougher policies regarding standards of credit worthiness, and 80 percent of the respondents have become firmer toward the loan applications of new customers since the last survey, though by necessity about half the banks had to become more selective with the loan applications of established customers as well. Between the February and May surveys, loans to finance companies at large banks increased substantially, and price and nonprice terms of lending to finance companies also tightened, but not to the degree of In contrast to the 80 percent tightening toward nonfinancial businesses. of the respondents who reported higher interest rates to nonfinancial firms, less than half the respondents indicated that rates charged finance companies had become firmer. Similarly, the compensating balance requirements and new commitments to finance companies did not show the tightening adopted for loans to nonfinancial businesses.

*Prepared by Paul W. Boltz, Economist, Research and Statistics.

Banking Section, Division of

A - 2 Major bank lenders to finance companies were contacted by Reserve Banks, and the majority indicated that lending policies are typically firmer toward finance companies than toward nonfinancial businesses and that in the present period the terms on loans to nonfinancial businesses were not more strict than loans to finance companies. Almost half the respondents indicated less willingness to make mortgage loans than at the time of the previous survey. There was also more reluctance to make consumer instalment loans, participation loans, and loans to brokers. The large banks on the survey panel had experienced heavier loan demand in the last three months and expected heavier loan demand in the coming period than the smaller banks on the panel, those with assets of less than $1 billion, and the larger banks tended to be somewhat more firm in their lending policies. Regionally, the tightening of terms was most evident at banks in the major money centers--that is, in the Second, Seventh, and Twelfth Districts.

NOT FOR QUOTATION OR PUBLICATION

PAGE 01

TABLE 1

QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S. 1/ COMPARED TO THREE MONTHS MAY 15, 1974 (STATUS OF POLICY ON (NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING)

MUCH TOTAL BANKS

STRONGER PCT

BANKS

PCT

EARLIER)

MODERATELY STRONGER

ESSENTIALLY UNCHANGED

MODERATELY WEAKER

BANKS

PCT

MUCH WEAKER BANKS

PCT

STRENGTH OF DEMAND FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) TO THREE MONTHS

COMPARED

ANTICIPATED

DEMAND

AGO

IN NEXT 3 MONTHS

125

100.0

30.4

46.4

19.2

4.0

0.0

125

100.0

3.2

21.6

46.4

28.8

0.0

ANSWERING QUESTION BANKS LENDING

TO NCNFINANCIAL

TERMS AND

BANKS

PCT

MODERATELY FIRMER POLICY

ESSENTIALLY UNCHANGED POLICY

BANKS

PCT

MODFRATELY EASIER POLICY BANKS

PCT

MUCH EASIER POLICY BANKS

PCT

BUSINESSES wU

CONDITIONS:

125

100.0

48.0

32.8

18.4

0.8

0.0

125

100.0

22.4

40.0

36.0

1.6

0.0

125

100.0

20.8

36.0

43.2

0.0

125

100.0

8.8

22.4

68.0

0.8

0.0

ESTABLISHED CUSTOMFPS

125

100.0

2.4

42.4

55.2

0.0

NEW CUSTOMERS

125

100.0

38.4

40.0

20.8

0.8

0.0

124

100.0

3.2

39.5

56.5

0.8

0.0

124

100.0

33.9

32.3

33.0

0.8

0.0

INTEREST

RATE SURVEY

INTEREST RATES CrMPENSATING STANCAPRS MATURITY REVIEWING

LOCAL

SURVFY AS OF

CHARGED

SUPPORTING

OF CRECIT OF TERM

LOANS OR LOAN APPLICATIONS

AREA CUSTOMERS

SERVICE

BALANCES

WORTHINESS

CREDIT LINES

SERVICF

NONLOCAL

PCT

MUCH FIRMER POLICY

APEA CUSTCMERS

LFNDING PRACTICES MAY 15, 1974.

125 LARGE BANKS

REPORTING IN THE

FECERAL

RESERVE

QUARTERLY

NOT FOR

QUOTATION OR

PUBLICATION

TABLE 1

MUCH ANSWERING QUESTION BANKS FACTORS

RELATING

TO APPLICANT

BANKS

PCT

MODERATELY FIRMER POLICY

ESSENTIALLY UNCHANGED POLICY

MODERATELY EASIER POLICY

BANKS

PCT

MUCH EASIER POLICY BANKS

PCT

125

100.0

25.6

38.4

36.0

0.0

125

100.0

17.6

32.0

50.4

0.0

125

100.0

24.8

20.0

55.2

0.0

BALANCES

125

100.0

8.8

19.2

72.0

0.0

RECUIREMENTS

125

100.0

14.4

23.2

62.4

0.0

125

100.0

28.8

31.2

39.2

0.8

0.0

USE OF THE LOAN

LENDING TO "NONCAPTIVE"

FIRMER POLICY

VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS INTENDED

PCT

PAGE 02

(CONTINUED)

FINANCE

COMPANIES

TERMS AND CONDITIONS: INTEREST PATES

OR SUPPORTING

COMPENSATING

ENFORCEMENT

CHARGED

ESTABLISHING

BALANCE

NEW OR

LARGER

CREDIT LINES

ANSWERING QUESTION BANKS WILLINGNESS TERM

TO MAKE

LOANS

CONSUMER SINGLE

OTHER TYPES

TO BUSINESSES

INSTALMENT

FAMILY

LOANS

MORTGAGE

MULTI-FAMILY MORTGAGE ALL OTHER

MORTGAGE

PARTICIPATION CORRESPONDENT LOANS

LOANS LOANS

LOANS

LOANS WITH BANKS

TO BROKERS

PCT

CONSIDERABLY LESS WILLING BANKS

PCT

MODERATELY LESS WILLING

ESSENTIALLY UNCHANGED

MODERATELY MORE WILLING

BANKS

PCT

CONSIDERABLY MORE WILLING BANKS

PCT

LOANS 125

100.0

12.0

36.8

51.2

0.0

124

100.0

4.0

14.5

77.5

4.0

0.0

122

100.0

21.3

25.4

52.5

0.8

0.0

121

100.0

20.7

24.0

55.3

0.0

121

100.0

17.4

37.2

45.4

0.0

125

100.0

9.6

22.4

66.4

1.6

0.0

124

100.0

16.9

20.2

62.9

0.0

FOR THESE FACTORS, FIRMER MEANS THE FACTORS WERE CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS

CONSIDERED MORE IMPORTANT.

IMPORTANT

IN MAKING DECISIONS FOR APPROVING

SUPPLEMENTAL APPENDIX B* MONTHLY SURVEY OF BANK LOAN COMMITMENTS APRIL 30, 1974 The very rapid growth of loans made under commitments to financial and nonfinancial businesses during April caused outstanding unused commitments to decline for the second consecutive month at the 131 large banks participating in the Monthly Loan Commitment Survey. The rate of growth of new commitments slowed from the extreme pace of March, but was still rapid. However, the new commitments were not large enough to offset takedowns, cancellations, and expirations. Nonbank financial institutions had large takedowns at commercial banks in April, and the decline in outstanding unused commitments to these institutions accounted for most of the decline in total unused commitments (Table 1). A reduction of commitments to commercial and industrial borrowers In conmade up the remainder of the decline in total unused commitments. trast, unused commitments for real estate loans showed a modest increase, the first increase of any proportion in eight months. The decline in the rate of growth of C&I loans at all commercial banks in April from the previous month was relatively larger on an unadjusted Similarly, C&I loans made under basis than on a seasonally adjusted basis. commitments, unadjusted, showed a much slower growth in April than in May, and the less rapid pace of takedowns of C&I loans accounted for the lower Loans to nonrate of growth of total loans under commitments (Table 2). bank financial institutions accelerated, and real estate loans increased The total growth of loans under after three months of almost no growth. commitments, though less than in March, was considerable, and the utilization ratios for nearly all types of loans rose (Table 3). New commitments decelerated from the exceedingly high rate of growth which the series reached in March, but new commitments still appear. Most of the growth was in new commitments to be expanding rapidly (Table 4). to C&I borrowers.

*Prepared by Paul W. Boltz, Economist, and Statistics.

Banking Section, Division of Research

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS BANKS 2/ AT SELECTED LARGE U.S. 30, 1974) (AS OF APR. TABLE

1 - UNUSED COMMITMENTS

(DOLLAR

(2)

(1) C t I FIRMS TOTAL

AMT JULY 31 AUGUST

0.0o

76.51

SEPTEMBER

75.61 -

OCTOBER

78.41

NOVEMBER

78.91

DECEMBER

78.41

JANUARY 31

0.61 1.1 --

60.01

3.71II 2.1

FEBRUARY

II.-

MARCH 31

79.91 - 0.7|

APRIL 30

JUL 73 - APR AVERAGE

NUMBER

0.61

80.51

79.51

78.41

OF BANKS

131

BANKS PARTICIPATING

5.11

0.01

(4)

CREDITSI It CHGI

0.01 17.81 I1 2.91 18.41

23.71

I I 4.81 -3.71

17.71 -3.51

22.51 -3.61

5.01

2.61

I I 4.81 -2.41 I I 5.01

4.11

I 1 4.81 -5.21 I I !.CI 4.11 I I 3.71

0.4

I 5.51 I I

I 5.91 I I1

D.41

5.01

0.91

THE MONTHLY

1.01

23.41 -1.41

18.51

3.31

18.11

-1.81

17.81 I. -1.61 18.01 0.8 | 17.91 -0.31 18.11

22.91

1.31

(t )

(7)

FEAL I NON-EANK FINANCIAL I EC1AIE I OTHER CONFIRMED MLRTGAGES ICOMMITMENTS I INSTITUTIIONS5 LINES AMI I1 rf I CHG-l AMT %t LHGI AMT It CHGI AMT 1% CHG1 AMT C

I I

I 0.01 I 1.21 I I 50.31 0.11 I I

I I ?.21 0.01 I I 2.91 -b.51 I I 2.81 -3.91 I I

52.61

3.01

I 49.61 I 50.21

4.61

I I I

5.91

9.11

22.91

AM'I

(9) TITAL Cl MMITMFrIS IY

IG 10b.51

0.01

f -,

o.O

109.71

1.0

24.01

4.81

0.91

24.31

1.11

8 .71 -5.01 9.21 8.71

1(0b.6

25.41

4.61

6.31 -4.31

112.21

2.2

8.21 -1.2

113.11

(.L

8.21

-0.11

111.91 -1.0

-2.11

114.21

-(.9

1.01

23.31

2.11

52.71

23.21

-0.61

52.41

22.61

-2.41

54.41

0.21 -0.61 3.81

23.01 1

1.51

54.71

23.11

0.51

I I 53.91 -1.41

23.61

2.11

0.61

53.11 -1.51

2.21

2.91

-3.51

26.01

2.81

-1.71

25.31 -2.4(

3.01 2.81

I 2.91

6.41 -6.51

3.11

2.91 -1.31

26.21

3.31 1 0.71

26.41 1 I 25.91 -1.71I 24.91

b.GI -0.5 I 114.91

113.51

-1.1

(.31

112.11

-1.1

8.31 -1.81

111.91

7.71 7.71

-3.eI

-4.31

I 18.01

0.21

LOAN COMMITMENT

NOTE:

O.uI

I 17.0|

(5)

I ITERM LOANS LI I

I I 5.01 -1.31

5.21

- 0.,11

TERM I REVOLVING CRFDITS IREV. LOANS I It CHGI AMT AMT 1 CHGI AMT

O.U

(3)

J2 .

76.51

IN BILLIONS)

AMOUNTS

23.11

0.01

52.41

0.81

2.91 -1.11

25.11

1.CI

SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE.

MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING. **

1.4

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMIT AT SELECTED LARGE U.S. BANKS (AS OF APR. 30, 1974)

(11 cCcI e I FIRMS TOTAL It

AMT

JULY 31 AUGUST

(2) CsI TERM LOANS

I I rutr

AMT

0.01

63.8

63.71 -0.2

SEPTEMBER

2.81

65.41

-1.41

rfUL

I 0.01 I 7.91

16.11

I 17.41 17.5

17.51

£4.51

OCTOBER 31

I I

1 -0.31

(DOLLAR

AMOUNTS

(3) C I REVOLVING CREDITS AMT

0.81

TABLE 2

16.91 17.31

18.11 18.31

UNDER IN

AMT

0.01 I1 2.61 I1 4.61 I1 1.31

rulr

34.41

COMMITMENTS 2/

BILLIONS)

I (4) I I C c I ITERM LOANS C6 IRFV. CREDITSI

rur-H

LOANS

0.01

(51 C I CONFIRMED LINES AMT

24.21

I 34.71

0.81

35.61

2.71

35.81

ENTS

0.51

21.01 24.21 1

(6) C cI I OTHER ICOMMITMENTS I I

rucl

AMT

3.21

I I

(7) I NON-BANK FINANCIAL I INSTITUTIONSI

rucl

I 0.01 I -0.21

AMT

65.71

1.91

17.61

0.71

19.11

36.71

2.61

DECEMBFP 31

67.11

2 .U

18.11

2.81|

37.11 19.01 -0.61 I1 19.21 0.71 37.21

1.11 0.21

16.3|

JANUARY 31 FEBRUARY

MARCH 31 APRIL

72.21

23.81 -4.61

14.31

1.41

19.61

2.31

37.91

3 X I -1.11 2.01C

18.51

1.31

20.51

4.61

39.01

3.01

3.71 I 27.91 12.91

3.01

19.41

4.51

20.71

1.71

lb Ib.01 2.11

19.11

4I JUL 73 - APR AVERAGF

NUMFER

EANYS

(7.4l1

0.91 I 24.81 3.51 I 23.81 -4. C 24.01

18.31

AMT

24.71

40.11

2.71

26.91

2.31

37.11

1.71

25.21

3.61

(ru1I

AMI

0.01

15.51

0.0|

95.41

d(.0

4.81 -6.91 0.01

16.01 -0.5 I

16.11

4.11

95.81

(.4

4.81

16.71

4.01

16.71

3.4)

98.71

3.0

4.91

1.71

17.11

2.61

98.01 -(.7

16.41

5.01

2.CI

16.81

-1.71

5.11

2.01

18.51

10.(01

5.31

3.51

17.21

-6.71

17.(1

-o.L 7

17.01

5.11 . 1 -4.2

- 1

17.21 I -•I

170

3.41

18.21

5.61

17.(I

1.41

19.31

i.11

17.01

2.21

99..a1

5.11

0.41

17.41

2.11

16.f I

I 101.8 0.21 107.31 I 1.41 1.21 101.61

131

BANKS

LOANS UNDER COMMITMENTS ARE DEFINED AS ALL LOANS UNDER COMMITMENTS CURRENTLY OR PREVIOUSLY IN FORCE, LESS REPAYMENTS OF THE PRINCIPAL. DATA ARE DISTORTED BY TAKEDOWNS OF LOAN COMMITMENTS BY OVERSEAS BRANCHES OF U.S. BANKS AND LOAN SALES.

PARTICIPATING

IN THE MONTHLY

LOAN COMMITMENT

NOTE:

SURVEY

ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE.

MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING.

1.3

3.2 1.21 102.51 1 I 0.01 100.51 -19

110.61 2.11

f'1r

16.11

1.11

(9) TOTAL I I COMMITMENTS I

5.11

1 1.91

67.71

-0.41

4.41

rwr.I

NOVEMBFR 30

(8) REAL ESTATE MORTGAGES

THE REPORTED

1. ; '.4

1.7 1.7

w CO

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS 1/ (AS OF APR. 30, 1974) TABLE 3 - UTILIZATION RATIO 2/ (PERCENTAGES) (1) C C

(2) CtI

I I

TERM LOANS

FIRMS TOTAL I

13) (4) 15) I (61 (7) C & I I NON-BANK I I C c SeCI I C REVOLVING ITERM + REV.I CONFIRMED I OTHER I FINANCIAL CREDITS LINES ICOMMITMENTSI INSTS. I I I I I I

(8) REAL ESTATE MORTGAGES -

(9) TOTAL

(1) SHL F -TEFM

TUT AL•/

JULY 31

45.5

76.0

48.6

AUGUST 31

45.4

77.6

48.5

SEPTEMBER 30

46.4

78.4

50.5

S61.2

OCTOBER

45.1

77.9

50.6

45.5

76.4

DECEMBER 31

46.1

7.2

JANUARY 31

45.3

FEBRUARY 28 MARCH 31

NOVEMBER

APRIL 30 JUL 73 -

32.8

61.6

41.3

63.0

46.8

40.0

32.5

62.0

40.0

63.8

46.6

39.5

33.2

63.1

40.7

65.7

47.6

40.4

61.0

31.1

62.2

40.2

66.3

46.6

39.3

50.9

61.2

31.3

63.5

39.3

67.1

46.8

39.4

51.2

61.6

32.2

64.3

42.2

67.4

47.8

40.6

79.0

51.8

62.2

30.5

63.7

39.7

67.9

46.8

39.3

45.7

7E.6

52.1

62.3

31.1

64.2

39.4

68.0

47.0

39.5

47.5

78.2

53.3

34.1

64.3

41.2

69.0

48.6

41.6

48.3

APR

59.2

46.1

NUMBER OF BANKS

131

59.7

62.8

78.0

53.4

63.0

35.2

64.9

43.6

69.2

49.7

42.6

78.0

51.1

61.4

32.4

63.4

40.8

66.7

47.4

40.2

AVERAGE

BANKS

PARTICIPATING

IN IHE MONTHLY

LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE.

21 THE UTILIZATION RATIO IS THE RATIO, EXPRESSED AS A PERCENTAGE, 3/ EXCLUDES REAL ESTATE LOANS AND TERM LOANS.

NOTE:

MINOR

OF LOANS UNDER COMMITMENTS TO THE SUM OF UNUSED COMMITMENTS AND LOANS UNDER COMMITMENTS

INCONSISTENCIFS MAY OCCUR DUE TO ROUNDING.

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS 1/ 30, 1974) (AS OF APR.

(1) C EI FIRMS TOTAL

IT I

AMT

I rwfr

JULY 31

4.41

AUGUST 31

I I 4.31 -2.11

SEPTEMBER

I I 3.71-14.6)

OCTOBER

0.0)

I 4.31

DECEMBER

JANUARY 31

APRIL 30

4.91

NUMBER OF BANKS

131

I I

0.91

r4ucI

0.01

AMT

I 1.81

rut1i

AMT

I o.ol

4.91 I

0.71-19.81

0.81-25.31

1.91 6.71 I I 1.51-22.81

I I 1.01 28.31

1.71 18.21

1.11I -4.41I

I f1 2.21 25.31 I I 2.41 9.51 I I

4.71

151 C c CONFIRMED LINES

0.91 I

41.31

(41

I C 8 I ITERM LOANS 91 (REV. CREDITSI

BILLIONS)

I I 1.01 13.01 I I

1.01

AMOUNTS

I APR

0.01

1 JUL 73 -

5.91 36.01 1 I 6.31 6.91

MARCH 31

6.71

4.31 -3.71 I I

FEBRUARY 28

rFCH AMT

0.8(

(DOLLAR

C I REVOLVING CREDITS

0.71

4.61 7.21 I I 1.71 4.71 I I 4.51 -4.91 I I

AMT

- NEW COMMITMENTS

(31 I

I 17.91

9 NOVEMBER 30

(2) C I TERM LOANS

I I

TABLE 4

1.31

24.61

0.81-39.81 I I

0.81 4.71 I I 1.31 55.21 I 1.21

I I 1.01

-7.21

I I 7.81

0.81-24.11 I I 0.91 6.31 I

1.31 43.71 I I 1.61 26.41 I I 1 1.11

1 8.61

(6) CcI OTHER ICOMMITMENTS

rilI

AMT

2.21

0.01

rur-1

0.41

1.61-32.61 I I 1.71 5.51 I I 2.51 49.31

2.81I

9.51I

2.01

1.ol

0.01

0.91

0.51 26.21 I

1.41-23.21

0.68

I1 1.71 18.21

I I 0.91 16.81 I I

1.71

0.1

46.11

I 2.01 23.91 I 2.0 -0.41 I 2.71 31.71 2.9| 2.01

0.71-12.41

BANKS PARTICIPATING

THE MONTHLY LOAN

NOTE:

0.91 I

-7.51

9.41 1

-6.31

27.01

I I 0.91-15.81 I I

0.61-29.81

0.71-23.51

I I 0.61 11.91

0.81

19.71

1.ol

25.9(

I I

6.71 4.41

I I 1.21 0.01 I 9 1.11 -3.3( I I 0.71-34.31

0.61 -2.21 I I

0.7110.77.31

0.91

2.21

I 6.51

6.31 -3.1

I 5.21-17.4

I 6.21 16.3

1 I 0.71-25.51

6.29

L.1

6.71

8.9

1.0o

35.01 I I 0.81-14.81 I I 0.71-10.21

0.81 12.81 I1 I

7.51 31.0 1 8.11 U.4

0.91 -. 89 0.91

6.21 -. 0 1 5.71 -7.3

-0.81

6.5 6.51

COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE.

MINOR INCONSISTENCIES

MAY OCCUR DUE TO ROUNDING.

(.0

1.01 30.41

I 1.01

I 9 0.81 23.81

AVERAGE

(9) (8) 1 REAL I TOTAL ESTATE COMMITMENTS MORTGAGES AMT IT ruCI AMT It ftU4

7.61

o0.0

0.8( -9.51 I 9 0.61

0.81-14.91

1.61 -2.21

1.91-14.81

(7) I NON-BANK FINANCIAL I INSTITUTIONSI AMT 1 rwrCI I

3.4 5.4

SUPPLEMENTAL APPENDIX C* CONSTRUCTION LOANS AT COMMERCIAL BANKS

A special Federal Reserve survey of more then 100 commercial banks during the first two weeks of June indicated that over half of the respondents have experienced more then the usual number of problems with outstanding construction loans. These problems, which have primarily taken the form of an increased incidence of builder requests for loan size increases and loan maturity extensions, most frequently are related to cost overruns associated with the high interest rates on construction loans (usually 3-to-5 points above the prime rate) and with construction types Loans for construction of all delays imposed by material shortages. Even of properties, not just residential units, seemed to be affected. The so, condominiums and single-family homes were most frequently cited. respondents also noted that such problems appear to be shared by other In this connection REIT's were mentioned lenders in their geographic area. However, most banks did not consider the situation in several instances. particularly serious at this time, although many have already taken a number of steps to minimize their difficulties, including tightening of standards for construction loans and either limiting new commitments on such loans, or curtailing them altogether. Requests for larger loan amounts only because of the higher interest costs, While of material and related components. to rise significantly during the remainder a factor in only a couple of instances.

appear to be more frequent not but also because of rising prices builder labor costs are expected of 1974, they were mentioned as

Requests for loan maturity extensions seem to be more frequent for several reasons. In several instances bankers noted that builder commitments for permanent financing had expired because of completion delays due to material shortages, but such shortages did not appear uniformly to relate to the same types of products in the country as a whole or even within specific districts. Also, extensions have been needed to carry the larger than normal builder inventories of unsold new single-family homes and condominiums. Nationally, sales of such units have remained relatively slow for some time, and in April, the median number of months from start to sale of single-family units was 7.3--nearly 3 months more than a year earlier.

*Prepared by Albert M. Teplin, Economist, Mortgage, Agricultural, Consumer Finance Section, Division of Research and Statistics.

and

Cite this document

APA

Federal Reserve (1974, June 17). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19740618_part1

BibTeX

@misc{wtfs_greenbook_19740618_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1974},
  month = {Jun},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19740618_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}